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Despite
the negative influence of political developments on investment and growth -
reduced investment inflows and increased cost of capital; hindered capacity of
the governments to implement reforms; and seized up business activity within
the economies, in economic terms, the region has returned to a steady growth
pattern, with positive trend expected in the coming period.

A
welcome development is the underlying rebalancing of the economy that
has been happening over the past five years, with steadily increasing exports
and somewhat subdued imports. This has led to a considerable reduction of the
negative trade balance that the region has with is trading partners.

Return
of employment growth is another success story. The
Western Balkans economies have managed to add almost 400,000 jobs in the
previous five years. Although performance differed between the economies,
the trend is easy to spot and is also expected to continue into the next
year.

Croatia
withdrew from the SEE 2020 monitoring process during this year due to its EU
2020 monitoring responsibilities. This had an obvious impact on the
quantification of regional headline targets and on their composition. However,
dynamic comparisons are still possible between the WB6 economies, allowing
identification of some important trends and developments in SEE 2020
implementation.

In 2016 the
region saw varied progress in SEE 2020 Strategy implementation. The
constantly changing SEE 2020 implementation context significantly influenced
the performance of participating economies.